Comments about real estate, economy, and issues that affect my job as a Realtor.
Lately, of great importance is the display of the most important
PRE-CONSTRUCTION PROJECTS IN SOUTH FLORIDA.
My name is Henry B. Nathan
I am a realtor at United Realty Group.
My phone # is 954-296-6741

Tuesday, September 30, 2008

A key source of employment in Florida, housing construction, sales, financing and maintenance are major components of our economy. Property taxes have increased well above the official inflation rates during the last two or three decades.

Thousands of new homes and condos in every location have surely tremendously broadened the taxable base of most cities in South Florida. That has not been enough to feed the appetite of voracious cities and counties.

A couple of lukewarm regulations by our Florida congressmen have aimed to ease homeowners’ pains, as well as an amendment recently approved to increase the homestead exemption amount.Our taxes are calculated on the assessed value of each property, which is determined by the county property appraiser’s office, multiplied by the “millage” which is determined by the local governments.

While our legislators have focused on reducing the assessed values, local governments are starting to defeat this purpose by increasing their millage, which is what was to expect, and I wrote about it a long time ago.

However, the flood of new service charges that many cities are implementing is starting to look more and more as double taxation. Charging us for services traditionally covered by our property taxes is the new plague that relentless local authorities are uncovering. I wouldn’t be surprised if the cop handing you a ticket for a traffic violation could include an additional bill for his “services” with a "thank you for your business" remark, or if a local library could charge you a “shipping and handling” fee every time you pick a book.

Here is an example of this kind of creativity. The city of Davie is today's winner. Read this article from the Sun Sentinel.

By Susannah Bryan-South Florida Sun-Sentinel -September 30, 2008

Accident response fees are so controversial that five states — Georgia, Indiana, Missouri, Pennsylvania and Tennessee — have passed laws to ban them.

Yet Davie on Wednesday is set to give final approval to a measure that would bill at-fault residents and out-of-towners an estimated $840 for costs associated with responding to car accidents. If it can't be determined who is at fault, all parties would be billed.

"It is a cost recovery fee for people who are creating havoc on our highways," Councilwoman Susan Starkey said on Monday.

If approved, Davie would become the first municipality in South Florida to charge such a fee. The town tentatively approved it 3-2 on Sept. 17, with council members Michael Crowley, Marlon Luis and Susan Starkey supporting it. Mayor Tom Truex and Councilman Bryan Caletka rejected it.

As Davie moves ahead, insurance companies are working to persuade Florida to ban such fees. They argue the fee will raise insurance rates and is really a hidden tax.

"We have been trying hard to fight back," saidWilliam Stander, assistant vice president of Property Casualty Insurers Association of America, a trade group that represents more than 1,000 companies nationwide. "The idea that you should have to pay for police and fire services, it's offensive."

Insurers lobbied five states to ban the accident fee and each agreed because of concerns over double taxation.

State Rep. Martin Kiar, D-Davie, said the issue may come up in Florida this legislative session.

"People are having such a tough time making ends meet," Kiar said. "For the cities to impose another fee, it's just not fair to our people."

On July 28, Pembroke Pines commissioners voted against a similar fee, citing concerns it would expose the city to costly legal challenges. Officials in Plantation, Miramar and Southwest Ranches, who had briefly considered the idea, say they have dropped it.

If approved, Davie would hire Dayton, Ohio-based Cost Recovery Corp. to bill insurers. If they don't pay, nonresidents would get a bill but residents would not.

Supporters argue that Davie responds to more accidents than other cities because it is surrounded by Interstates 95, 595, 75 and Florida's Turnpike. As proposed, the fee would apply to accidents on highways and local roads that require emergency response, including those outside town.

Critics say the fee may lead to a tit-for-tat mentality, with cash-strapped cities passing similar laws to raise money.

In July, Weston City Manager John Flint said his city would likely charge an accident fee to residents of cities who impose such a fee on Westonites. But on Monday, Mayor Eric Hersh said he opposes such a plan.

Faced with an $12.6 million shortfall, city commissioners on Wednesday eliminated about 74 positions, including 61 vacancies, and cut pool hours, among other measures. The city also imposed a four-day, 40-hour work week, to begin in October for some employees.

Commissioners approved a property tax rate of $4.43 per $1,000 of assessed property value for the 2008-9 fiscal year, up from the current rate of $4.17 per $1,000 of assessed property value. The commission on Sept. 12 also voted to increase the residential fire protection fee to $209.63 per home and condo, an increase from $153.48 this year.

I wrote about the tax-rate trick. Property assessment goes down, they raise tax rate, we lose.

Friday, September 12, 2008

We all know that our legislature have mandated our cities last year to roll back their taxes.

And that real property values have declined substantially.

But, town after town, the local governments are finding their way to roll back any reprieve homeowners had got last year, and go on with the business-as-usual free spending. As many of us predicted, the resistance of the bureaucracy to the voters’ mandate has been very strong. Cuts in our services, charging us for previously free services, increases on services charges, and they saved for the end the most effective recourse: Increase the tax rate.

As I wrote before, your property taxes are calculated by multiplying the millage (or tax rate) by your taxable or assessed home value.

Since the taxable value is reduced, they just raise the tax rate. Et voila!

We voted to adjust the homestead exemption, to recoup part of our real-dollar losses due to inflation in the last decades. It wasn't long before they regrouped and hit us back.

You know the answer: raise the tax rate.

And then: make them pay for everything you can figure out.

Example: years ago, they reduced my garbage collection to once a week instead of twice.

My bulk yard-waste collection was reduced to once-a-year.

What do you think happened next? Savings for me? Wrong.

I got a reduced service which, according to the city, didn't degrade its quality.

Sure.

And from then on, I only saw my bills going up, instead of down.

There are so many taxes that have been built in our way of life that we have come to accept them as natural: Just check your water bill, your sewer bill, your telephone bill, your electricity bill, your cell phone bill; they all include funny surcharges, excises, fees; so many that I gave up on trying to understand.

Review them, line by line; even a monthly fee for the 911 service is on one of my bills. These things have been building up and slowly squeezing the common person' budget year after year. I don't object. These are services and we've got to pay for them.

But then I see my home taxes bill and I realize that this one large bill is on top of all that.

I don't think that my quality of life has improved at all since they built these thousands of condos. The new construction was supposed to "increase the tax base". That might have sounded as a price to pay for some tax relief. Again, I was wrong. It only meant more traffic and congestion; and more taxes.

One of these days, I would like to calculate exactly how much of our taxes goes to pay for the fine town halls, the doing and undoing of our street landscaping every few months, the impeccable offices, the unending bureaucracy, and what more; perhaps I will then have a better idea of why they need to raise my taxes.

There are so many creative ways to nickel-and-dime us. Did you hear about some cities now charging good money to anybody who has a car accident in their territory, to cover their police expenses? There is truly an excellence in how our elected officers can figure out tricks to “balance their budgets”.

The bottom line, once again, is that most our local governments believe that the sacrifices must be made and the sufferings be endured by the governed.

A real solution cannot be found within the context of the old philosophy of waste.

But that was the “elegant” solution that Hollywood chose to solve their budget problems:

Cut the lean, butnevercut the fat.

Check out how many white elephants can be found in your own town, as I they must have them in Hollywood, Miami Beach, or Pembroke Pines. Try to figure out how much waste and unnecessary spending you would avoid if you were a commissioner, and make up your own opinion.

HollywoodCity officials on Monday passed on first reading a proposal that would raise the property tax rates slightly to avoid a $14 million budget shortfall and mass layoffs.

The proposal passed 5-2 despite outcry from residents who took turns pleading with elected officials for a financial reprieve.

Those who voted for it said the increase, which includes higher fire and sanitation fees, would still give homeowners a lower tax bill because of declining property values. About 81 employees would get to to keep their jobs.

Opponents — Mayor Peter Bober and Commissioner Heidi O'Sheehan — each said they wanted staff members to suggest further cuts before a final vote on Monday.

"It might sound like a small increase, but it's exacerbated by the higher fees," said Bober, before voting against it. "It's not a ton of money but there really are a lot of people who can't afford it."

The commission chamber was filled with employees and union leaders, but none of them commented. Some residents took aim at some of the soaring employee costs and urged commissioners to make bold cuts to the city's workforce of roughly 1,485.

"If you don't have the political will to do it, you are either part of the problem, or you are incompetent and you don't deserve the position you have," one resident said.

Under the proposed $324 million budget, property owners will see their tax rates go up to about $6.24 for every $1,000 of taxable value, an increase from the current $5.95.

A flat fire fee will go from $109 to $130 for every residential unit. Sanitation fees also will go up 10 percent each year for the next five years.

The measures would result in 26 vacant position being slashed, but nobody would lose their current jobs. It also means the owner of a $292,000 homestead home would see a savings of about $11 in city taxes, instead of the $49 under the current rate.

I just wrote about something that is the talk of the town. (Of the dozens of towns in South Florida) .

Today, I am reading in the Miami Herald, about how homeowners are reacting.

That might bring some more insight on the issue.

Florida's down-means-up rule baffling taxpayers-Fri, Sep. 12, 2008

By BILL KACZOR,Associated Press Writer

Michael McKenna was baffled by his property tax assessment this year.

The market value of his Longwood home fell by nearly $52,000, yet its taxable value increased by 3 percent - about $4,000.

"It just doesn't make sense," McKenna said.

He's among more than a million primary homeowners across Florida who've been scratching their heads over the state's down-means-up "recapture" rule that's been raising their property taxes.

The rule has been on the books since 1995 but had no noticeable effect until the state's real estate market collapsed.

That effect would have been even greater if voters had not passed a tax-cutting amendment to the state's constitution in January. The recapture rule is eating into Amendment 1's estimated average savings of $240 a year for homeowners if not wiping them out altogether.

In an e-mail to the proposal's chief promoter, Gov. Charlie Crist, McKenna wrote that his "net tax savings will amount to a staggering $78."

"I thought, 'What's all the big hoopla about a tax break?' " McKenna said in an interview. "Nothing's changed."

Not yet, but lawmakers are expected to take up legislation to repeal the recapture rule next year.

"This was a tax increase that the Legislature really hadn't voted for or against," said Rep. Nick Thompson, R-Fort Myers. "The whole idea of the recapture rule is taxing people at a time when they can least afford it."

Thompson and Sen. Mike Bennett, R-Bradenton, sponsored similar repeals this year but they never got a floor vote in either chamber. That's because Senate leaders put a clamp on further property tax relief. They said they first wanted to see what effect Amendment 1 would have.

The recapture rule stems from a quirk in the Save Our Homes Amendment voters adopted in 1992. The amendment limits annual assessment increases for primary homes to no more than the increase in the Consumer Price Index or 3 percent, whichever is lower.

Save Our Homes, though, doesn't say what happens if market values should drop; so then-Gov. LawtonChiles and the Florida Cabinet adopted the recapture rule to cover that situation.

It requires an assessment to increase according to the amendment's criteria no matter if a home's market value goes up, down or stays the same.

The only limit is that an assessment cannot exceed a home's market value. That's unlikely because market prices have gone up over the long haul much more than assessments have increased thanks to the Save Our Homes cap.

As a result, the rule was seldom applied and largely forgotten until last year when Florida's housing market crashed.

The bills Thompson and Bennett are planning would reduce an assessment by the same percentage that home's market value falls. If that value remains unchanged, so would the assessment.

Those changes, though, would exacerbate inequities between homesteads and other types of property such as businesses and second homes, said Dominic Calabro, president of Florida TaxWatch, a budget watchdog group.

Until Amendment 1 passed there had been no cap on assessment increases for non-homestead properties. They now get a 10 percent annual limit, but that's expected to offer relatively little tax relief because values seldom go up that much in one year.

Calabro also questioned whether the Legislature can repeal the recapture rule without passing another constitutional amendment. That would take 60 percent approval at the polls and likely wouldn't go into effect until after the 2010 election.

A legislative staff analysis of Thompson's bill cited no legal bar to passing it, but at least one lawmaker plans to introduce a constitutional amendment to repeal the rule.

In 1995, BrowardCounty's then-property appraiser William Markham challenged the recapture rule at administrative hearing before the Cabinet passed it.

Administrative Law Judge Donald Alexander approved it as an appropriate way to apply the Save Our Homes Amendment when property values go down. He also rejected Markham's alternate proposal, which would have left assessments unchanged if values declined or stay unchanged.

Save Our Homes says no such thing, Alexander wrote, adding he had to go by its "plain language."

Even if lawmakers repeal the rule at their next regular session in March, that won't affect current tax bills.

It'll also be a moot issue - until the next housing bust - if the market recovers as predicted in late 2009 or early 2010, again driving up home values.

"I'm furious," said Edna Mattos, a Hernado homeowner affected by the recapture rule. "Next year may be too late."

In 2007 however, your property value went downit is now assessed at $375,000 instead of $400,000. You would of course expect a drop in your property taxes, right? Wrong.

Your 2007 tax notice will indicate a 3% increase in the taxable value, which becomes now $253,354.02.Consequently, you will pay more taxes in 2007 than in 2006, even though your home is worth less money.

Weird? Not if you are aware of the “recapture” rule adopted in 1995. The 3% increase will continue to apply every year, regardless of your property ‘s real value, until the taxable value and the real appraised value are equalized.

It means that, after a period of high raises in property values, a decade or more of flat values would progressively eat up most or all the savings that you had made through the “save our homes” protection. Eventually, you will end up losing it completely. Of course this is theoretical. But it is starting to happen and Florida homeowners are not happy.

The bizarre situation doesn’t affect the non-residents and all those who cannot take advantage of the “save-our-homes”.

Wednesday, September 10, 2008

I wrote about budget cuts, service cuts, and homeowners issues in South Florida.

This is a good example of how your (and my) money is spent.

Not that I am an opponent to everything that would promote our tourism, and the vision that Miami and South Florida inspires around the world; however a friendly city with well run libraries, numerous cultural activities, good movie theaters, convenient public transportation, pedestrian walking areas, nice small stores, good beaches and parks, could be a greater attraction to our visitors, than exhibiting a World Series trophy in a publicly financed stadium.

My idea is that since owning a professional sports team is a business, and if owners cannot come up with the money to build their own facility, it’s OK for the city to finance it or bear part of the cost.

But since the moment the stadium is built, the franchise will automatically double or triple in value, the city should in turn receive part of this capital gain. If the franchise owners are confident in their operation, as they want the city to believe, why not offer the city a part of this extra value.

What about making the city of Miami a partner in this business?

Just nonsense, of course.

It is much easier to have the city or the county get in some more debt, pay for the stadium, and in case of problems, they always have the recourse of cutting seniors transportation, social services to the handicapped or disadvantaged, reduce library hours, and I leave the rest to your imagination.

This is the text of the relevant article I read today in the Sun-Sentinel.

Florida Marlins to proceed with plans for new stadium after court victory

September 10, 2008 -By Sarah Talalay- The Sun Sentinel.

The Florida Marlins say they will proceed with plans for a $515 million ballpark at the site of the former Orange Bowl after a Miami judge ruled Tuesday the project serves a "paramount public purpose" — meaning public dollars can be used to build it.

Miami-Dade Circuit Judge Jeri Beth Cohen called the ballpark issue "contentious and emotional," but said the law is clear in the case filed by auto dealer Norman Braman targeting the financing of $3 billion in Miami projects, including the ballpark.

The Marlins, Miami-DadeCounty and city of Miami will continue negotiating final construction and financing agreements and hope to present them to city and county commissioners in the coming weeks. The team plans to unveil renderings of the 37,000-seat ballpark shortly.

"We will proceed immediately to finalize discussions with the County and the City to put in place all the long-awaited final agreements," Marlins owner Jeffrey Loria said in a statement. Braman vowed to fight on.

"We're optimistic we're going to prevail on appeal," Braman said. "We're going to take it to the district court and if necessary to the Supreme Court of the State of Florida."

Cohen plans to rule on the case's remaining count — whether a public vote is needed on a portion of the funding of the $3 billion in projects — after Sept. 15. She is waiting for the state Supreme Court to rule in similar cases.

Here we go again. I just read in the papers today that cuts in service in BrowardCounty are going ahead no matter how unpopular they are.

This is business as usual in Florida, where there is always a way around laws and good sense. Legislature mandated budget cuts? Cities can always find a way to circumvent them.

Lower assessment values due to real estate debacle? No problem, cities will get around the lower property values, by just pumping up their millage rate. Remember: the equation is: millage time assessed value. So either part of the equation can be raised to make your taxes higher.

Still not enough money?Cities and Counties will just cut services. Less parks, less educational services, less seniors transportation, and so forth.

And a last recourse? Just charge the property owner for services traditionally free.

All of this is been used alternatively by one or another city or county.

There might have been some savings. But nothing substantial. Nothing essential.

Our mini-cities with their duplicated services and ridiculous bureaucracy are a large part of the problems. I don’t have access or enough time for the research. But I would be curious to know how many police departments and fire departments and water departments, city commissioners, city managers we can count in the Tri-County area of Palm Beach, Broward and Dade, which population doesn’t even measure to that of a large world metropolitan area like London, or Tokyo.

I know that this will not sound as music to the ears of the concerned parties. But it’s something that will have to be addressed one day or another.

Generous pension plans, rampant bureaucracies, flamboyant city halls, are a luxury that has to be reassessed. At stake is home ownership for the common Floridian and perhaps the dynamism of our whole economy.

This is the article in the Sun-Sentinel, that triggered my comments.

Despite residents' protests, BrowardCounty forges ahead with cuts in service

Residents turned out en masse Tuesday night to protest spending cuts made in BrowardCounty government to guarantee property tax relief this fall. Despite the concerns, county commissioners held firm on Broward's most sweeping rollback in decades.

Parks will be closed most Tuesdays. Community bus routes with low ridership will cease. Libraries will open later and close earlier. Help for the mentally ill, the homeless and victims of domestic abuse will be curtailed.

"Nobody likes cutting library hours or closing parks, but we are trying to make decisions on being cost effective," Broward Mayor Lois Wexler said.

The average homeowner should save $96 on the county government portion of the tax bill. The county taxes paid on a home valued at $186,450, the average in Broward, will drop from $763 last year to $667 this year.

Commissioners had to fill an $87 million gap in their $3.6 billion budget because of the decline in real estate values this year and the change to the state constitution that doubles the homestead exemption. They will give final approval to the budget later this month.

As part of the cuts, community bus routes used by fewer than seven passengers an hour will be eliminated. Commissioners said they preferred cutting the shuttles rather than major bus routes, but agreed to ask cities if they want to take over the neighborhood routes.

Davie residents along Griffin Road said the loss of their shuttle would leave them with no way to go to the grocery store or work. They unsuccessfully tried to persuade the county to reconsider the cuts using ridership numbers since gas prices increased.

"We aren't close to anything at all — there is no supermarket, no drugstore, no clothing store," said Karen Howard, a resident of the GriffinGardens neighborhood. "So if we lose our bus because of the budget or whatever and you don't have a family member, you lose all your ability to get about."

Some park users also complained about the decision to close on Tuesday and eliminate early openings. Commissioners chose to close parks on Tuesday except during school breaks because that is the day with the lowest use.

"The end result is not the trimm ing of the fat, but the trimming of the lean," Fort Lauderdale resident Christopher Brennan said. "On 365 days a year, there are taxpaying Americans using the park system."

Sunday, September 07, 2008

One of the first alternative that I would present to buyers looking for a newly constructed, luxury condominium buildings in Aventura, and very large floorplans, will always be the Hampton South complex.

Hampton South has become the archetype of the most luxurious condominium buildings in Aventura.

Saturday, September 06, 2008

Governor Crist had high hopes that Justices would finally line up with the proponents of the amendments to be included in November ballot.

They unanimously (7-0) decided that the titles and summaries on the proposed ballot were misleading to the voters.

We will have to wait for the Florida legislators to address the issue again. They have two years before new constitutional amendments can be voted.I personally believe that the issues were too important to be dealt with the sort of casualness it drew from our elected officials, who were perhaps too busy to spend the necessary time and attention.

The Legislature did not come out with a reasonable solution to high property tax woes, notorious for afflicting residents and out of state property owners.

The proposal by the Taxation and Budget Reform Commission was evidently a partisan approach, in its attempt to sneak in the constitutional amendments, school vouchers plans which would have forced taxpayers to subsidize religious schools. Justices' opinion was that these considerations was completely out of the scope of this commission which meets every twenty years.

School boards were evidently relieved. Teachers, bus drivers had fought the proposal since its inception. Funding for schools would be been guaranteed for only one year, leaving at the whim of the legislature's disposal to thereafter replace the traditional funding of schools through property taxes revenues.

We will not see an increase of our sales taxes by 1%, nor will services presently exempt, be taxed to replace the lost revenues of property tax reduction.

The Realtors Association was disappointed, since a tax reduction of about 25% for residents and non-resident property owners as well, would have been a shot in the arm for the real estate industry.

And what do I personally think? The truth is that real estate is my business and I would appreciate anything that could alleviate the downturn, attract buyers, and slow down foreclosures and short sales.

However, as a concerned citizen, I believe that swapping taxes is no solution.

Our schools system which is dead last in the US, should be respected and its funding cannot be left to the whim of an obscure Taxation and Budget Reform Commission that meets every 20 years. It is ridiculous that what our legislature could not accomplish in many long sessions, should be addressed in this manner.

I did not appreciate that the constitutional separation between state and religion could be compromised by these amendments, and that the voters would have been misled by a sneaky ballot summary that did not adequately inform about the long-term consequences of these amendments if they were approved.

I wrote it many times. Tax Swaps are a game that only postpones the reality check.

The problem must be solved by a balance between what property owners want to pay versus the services they want to be provided. This should leave out the happy spending, the unnecessary bureaucracy, and the excesses that we have seen in cities and counties budgets.

Efficiency, thrift and good management are the words I want to hear.Threats of service cuts, and "tax swaps" are not the answer.

On the other hand, I don't believe that punishing those who do not own their residence, by increasing their sales taxes, and adding new taxes, is the best way to solve the problems of those who are lucky enough to own their home.

The state Supreme Court on Wednesday removed a multibillion tax swap plan from the November ballot, leaving supporters empty-handed for at least two more years in their quest for lower real estate taxes. Critics of the plan to eliminate most school property taxes said the ruling averts a potential disaster for public education.

The court issued the 7-0 ruling four hours after justices forcefully argued during a courtroom hearing that the ballot summary for Amendment 5 would have misled voters about its potential implications for school funding. The ruling is final.

The justices also knocked off the Nov. 4 ballot a pair of voucher amendments, in the latest twist in Florida's long-running legislative and legal battle over whether taxpayers' money can be used to send children to private religious schools.

In the tax case, justices said Wednesday that the amendment's 90-word ballot title and summary failed to give voters fair warning that the replacement revenue promised for schools was guaranteed only for the first year, 2010-11. After that, it would have been up to the Legislature.

The Amendment 5 plan would have handed a 25 percent tax cut to Florida property owners. But it could have jeopardized school funding, critics said, and led to a boost in the 6-cent sales tax and a state charge on services such as dry cleaning.

Gov. Charlie Crist, who backed the plan, said through a spokeswoman he was "disappointed the people will not have the opportunity to vote to lower their taxes."

"It really postpones significant, meaningful property tax reform for a long time, sadly," said John Mike, president of the Realtors Association of the Palm Beaches. Realtors now look to the 2010 election as the next chance to put a major tax initiative before voters.

Praise for the ruling came swiftly from the amendment's broad base of critics, from business interests worried about a services tax to teachers to some prominent Republican legislators. "Deep in my heart I knew that these were not good amendments for children, and that ultimately the American legal system would prevail," said Broward Schools Superintendent James Notter.

The Palm Beach County School Board chairman, Bill Graham, said the ruling is "almost Christmas and Hanukkah in September."

In the voucher case, the justices ruled unanimously to remove from the ballot two plans, Amendments 7 and 9, that would have set the constitutional groundwork for children to attend private religious schools at taxpayers' expense. At issue was whether vouchers would go beyond the scope of the appointed Taxation and Budget Reform Commission, which meets every 20 years to propose changes to the state's tax laws.Former Gov. Jeb Bush, a staunch supporter of vouchers, weighed in with a rare statement, saying the ruling was "extremely disappointing." Bush said the ruling places current voucher programs that subsidize more than 20,000 students in private schools in legal limbo.